Savings of less than 5% – You are supposed to save as much as 40% of your net earnings each month. When you see your savings shrinking to just 5%, it’s time to buckle up & make some dramatic changes before it’s too late
Drowned in too many bills – Do keep an eye on your net income after deducting all your loans & utility payments obligations. If you find your remaining cash pool shrinking, it’s time to take action: cut down your expenses
Dwindling cash pool – If a large portion of your monthly salary goes to paying loans & bills, you are likely to have gone over the edge. Anything beyond 30% of your gross income meant it’s time for some investigation as to why your bills are costing you more than it should.
Rising credit card balance – When it comes to credit card balances, try limit your balance to a max of RM2,000. eg. Once you hit the limit, refrain from using that credit card for the time being until after you have cleared all outstanding payments. Always try to pay more than just the minimum so that you don’t end up paying more interest than you had originally intended.
Sacrificing emergency funds – When you find yourself digging into your personal savings or emergency funds to pay for a purchase, it’s time to evaluate your spending & re-access your finances. Chances are you’re spending beyond your means & depleting your saving funds.
p/s: Prevention is better than cure. Watch your spending so that you don’t end up in the debt trap!